Are EVs still too expensive to break through?
Jato, a British research company, specialized in automotive data, claims that EVs are still too expensive to be bought in high numbers. Other analysts have high doubts about their research. Is 2020 the long-awaited turning point for the EV?
Jato recalculated the current prices for EVs to 2012, the beginning of the electric car on the market. It noted that the prices of EVs rose with 55% in the US and with 42% in the EU. Among others, it compared the price of a Renault Zoë, a Nissan Leaf, and a VW e-Golf between 2012 and now.
“Despite more power, an increased range, and shorter charging time, the prices stay too high for the consumer,” says Jato’s verdict. “Manufacturers have focused on technology, and the premium segment, there are not enough affordable electric cars.”
China, the biggest car market in the world, is the exception. Prices have fallen dramatically (halved practically). Together with significant government subsidies, the demand for EVs has boomed. Now that these incentives are disappearing, the Chinese market is decreasing slightly.
From the 1,3 million electric cars sold in 2018, 800.000 were sold in China alone, whereas the US and Europe each sold a mere 200.000. This tendency is the same for 2019.
Many analysts criticize the Jato findings. Auke Hoekstra from the Technical University Eindhoven (The Netherlands) points out that a lot of EVs are practically incomparable with cars from 10 years ago. Their power and range have increased significantly, and the price of battery capacity has come down from 900 euros per kWh to 100 to ,200 euros per kWh.
Undoubtedly, 2020 will be (partly?) the long-awaited turning point for the electric car. When you just look at the Brussels Motor Show opening in January, many booths are focusing on EVs. Never before, the electric car was so prominently present.
There is an abundance of new EV models coming onto the market. The most exciting fact is that there are also much cheaper cars now. Just looking around, there are more than ten models with prices starting around 30.000 euros.
That’s still 20.000 more than where the smallest ICE cars are starting, but you have to take two things into account. The total cost of ownership (TCO) of an EV is not much higher anymore than that of an ICE car. The price difference between comparable cars (EV or ICE) is less than 5.000 euros.
The only problem is that there are no electric cars yet (Renault is preparing one) in the lowest car segments. Segments that car manufacturers tend to leave because there is no money to make here.
A survey published on Monday noted that the average Flemish consumer is ready to pay 25.000 euros for a new car. That’s approaching the starting prices of EVs. With the incentive from the government (4.000-euros premium), the gap was practically closed.
But the Flemish government has abolished the premium as of 2020. The reasoning was that there weren’t enough people who applied for it. But right now, the (cheaper) EVs are coming where such a premium can make the whole difference. How shortsighted can one be?
Nevertheless, we have the feeling that the electric market is going to explode this year. People are getting ready for it. And the manufacturers fear ‘Damocles’ sword’ at the end of the year: the huge CO2 fines. PSA CEO, Carlos Tavares, has already repeated: “I prefer to give money to my clients, not to the government.” So, the prices of EVs in the future will diminish, not increase.